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Canadian Gaming News, Issue 38 (1997, June)

Canadian Gaming News, Issue 38 (1997, June) - Page 1

Canadian Gaming News
Issue 38 June, 1997
Well it's finally decided. Winnipeg's
Crystal Casino - Canada's oldest full-time
casino which opened December
3 1, 1989 - will close in early 1999.
( We have to be careful when we talk
about the honour of being Canada's
oldest casino as both Diamond Tooth
Gerties and Northlands Park Casino
also lay claim to the special designa-tion
of being Canada's first ' seasonal'
casino).
The Crystal's slots and table games
will be consolidated with those of
Club Regent and McPhillips. The
latter will, in turn, each receive $ 25
million retrofits designed to turn them
into destination properties. While a
$ 50 million retrofit is not large in
global terms, it is significant when we
remember that original capital expen-ditures
( in 1993) were $ 25 million for
Club Regent and $ 32 million for
McPhillips.
As we have previously written, it has
been common knowledge for some
time that the Crystal would move
from the 7th floor of the Fort Garry
Hotel when its lease expires Decem-ber,
1999.
While we suspect that the Manitoba
Lotteries Corporation, its parent,
was quite capable of deciding its fate,
a recommendation by the Desjardins
Committee that the crystal's size, lo-cation
and the scope of its gaming
operations ( the advisability of offering
licenced beverage services, food and
Ivan Sack
Crystal Casino ' s days have
just been numbered
entertainment) be reviewed, added
impetus to the need for a decision.
Price Waterhouse was brought in
to review the Crystal's operations
and make recommendations as to its
future.
Price Waterhouse condensed its
analysis around the following op-tions:
consolidate the Crystal's op-erations
with those at Club
Regent and McPhillips;
expand McPhillips, build a
new downtown casino, and
eventually close Club Regent;
construct a downtown casino
while maintaining existing
operations at McPhillips and
Club Regent.
A review of market demographics,
market maturity, out- of- province
casino competition, financial crite-ria,
tourism opportunities, amenities
and current and lapse player prefer-ences
lead the consultant to recom-mend
the first option which the gov-ernment
then endorsed.
We gather that while a new down-town
casino was an attractive op-tion,
given the trend toward new
facilities and amenities across the
country, MLC's already large in-vestment
in Club Regent and
McPhillips as well as the cost of
building a new facility, estimated at
$ 90 million, eventually weighed in
favour of a consolidation. An addi-tional
factor was the estimated $ 20
million which would then still have
had to be spent to upgrade Club
Regent and McPhillips to maintain
their viable in the face of competi-tion
from the new downtown facility.
One option which we would have con-sidered,
but which did not make the
short list, was building a new, state- of-the-
art facility and selling off Club
Regent and McPhillips.
A reality underlining all the discus-sions
is the fact that the Manitoba
casino market, which faces competi-tion
from VLTs, lotteries and horse
racing within that province, and com-petition
from 18 casinos within a 6-
hour drive of Winnipeg, is a mature
gaming market. It is doubtful that a
significant increase in gaming stations
would have yielded corresponding in-creases
in net profits.
Manitoba's casinos do not serve
liquor. To compete with casinos in
Saskatchewan, North Dakota and
Minnesota, all of which serve liquor at
gaming stations, the renovated casinos
will include licenced restaurants and
lounges. However, they will still not
serve liquor at gaming stations.
Given that this restriction will con-tinue
to limit the performance of Man-itoba's
casinos, particularly amongst
those who frequent other casinos, one
has to question why a government
which is quite comfortable placing
VLTs in bars and restaurants, sud-denly
becomes up tight and puritani-cal
when it comes to serving liquor at
gaming stations in a casino? The
government has obviously not yet
fully come to grips with this issue. If
Regina, Windsor, Montreal, Hull, Ni-agara
Falls and Charlevoix can serve
liquor at gaming stations without the
roof collapsing, why not Winnipeg?
No numbers have been established yet
though we gather that Club Regent

The University of Lethbridge Library received permission from Ivan Sack to digitize and display this content.

Full-Text

Canadian Gaming News
Issue 38 June, 1997
Well it's finally decided. Winnipeg's
Crystal Casino - Canada's oldest full-time
casino which opened December
3 1, 1989 - will close in early 1999.
( We have to be careful when we talk
about the honour of being Canada's
oldest casino as both Diamond Tooth
Gerties and Northlands Park Casino
also lay claim to the special designa-tion
of being Canada's first ' seasonal'
casino).
The Crystal's slots and table games
will be consolidated with those of
Club Regent and McPhillips. The
latter will, in turn, each receive $ 25
million retrofits designed to turn them
into destination properties. While a
$ 50 million retrofit is not large in
global terms, it is significant when we
remember that original capital expen-ditures
( in 1993) were $ 25 million for
Club Regent and $ 32 million for
McPhillips.
As we have previously written, it has
been common knowledge for some
time that the Crystal would move
from the 7th floor of the Fort Garry
Hotel when its lease expires Decem-ber,
1999.
While we suspect that the Manitoba
Lotteries Corporation, its parent,
was quite capable of deciding its fate,
a recommendation by the Desjardins
Committee that the crystal's size, lo-cation
and the scope of its gaming
operations ( the advisability of offering
licenced beverage services, food and
Ivan Sack
Crystal Casino ' s days have
just been numbered
entertainment) be reviewed, added
impetus to the need for a decision.
Price Waterhouse was brought in
to review the Crystal's operations
and make recommendations as to its
future.
Price Waterhouse condensed its
analysis around the following op-tions:
consolidate the Crystal's op-erations
with those at Club
Regent and McPhillips;
expand McPhillips, build a
new downtown casino, and
eventually close Club Regent;
construct a downtown casino
while maintaining existing
operations at McPhillips and
Club Regent.
A review of market demographics,
market maturity, out- of- province
casino competition, financial crite-ria,
tourism opportunities, amenities
and current and lapse player prefer-ences
lead the consultant to recom-mend
the first option which the gov-ernment
then endorsed.
We gather that while a new down-town
casino was an attractive op-tion,
given the trend toward new
facilities and amenities across the
country, MLC's already large in-vestment
in Club Regent and
McPhillips as well as the cost of
building a new facility, estimated at
$ 90 million, eventually weighed in
favour of a consolidation. An addi-tional
factor was the estimated $ 20
million which would then still have
had to be spent to upgrade Club
Regent and McPhillips to maintain
their viable in the face of competi-tion
from the new downtown facility.
One option which we would have con-sidered,
but which did not make the
short list, was building a new, state- of-the-
art facility and selling off Club
Regent and McPhillips.
A reality underlining all the discus-sions
is the fact that the Manitoba
casino market, which faces competi-tion
from VLTs, lotteries and horse
racing within that province, and com-petition
from 18 casinos within a 6-
hour drive of Winnipeg, is a mature
gaming market. It is doubtful that a
significant increase in gaming stations
would have yielded corresponding in-creases
in net profits.
Manitoba's casinos do not serve
liquor. To compete with casinos in
Saskatchewan, North Dakota and
Minnesota, all of which serve liquor at
gaming stations, the renovated casinos
will include licenced restaurants and
lounges. However, they will still not
serve liquor at gaming stations.
Given that this restriction will con-tinue
to limit the performance of Man-itoba's
casinos, particularly amongst
those who frequent other casinos, one
has to question why a government
which is quite comfortable placing
VLTs in bars and restaurants, sud-denly
becomes up tight and puritani-cal
when it comes to serving liquor at
gaming stations in a casino? The
government has obviously not yet
fully come to grips with this issue. If
Regina, Windsor, Montreal, Hull, Ni-agara
Falls and Charlevoix can serve
liquor at gaming stations without the
roof collapsing, why not Winnipeg?
No numbers have been established yet
though we gather that Club Regent